Net Accounts Receivable- Accounts Receivable plus Allowance for Doubtful Accounts Accounts Receivable less Allowance for Doubtful Accounts Ivy Co. uses the allowance method for accounting for their bad debt. They estimate their bad debt expense based upon net credit sales. Past experience shows that about 1% of net credit sales each year are uncollectible. The net credit sales for the year is $1,000,000. The adjusting entry for bad debts would be: a. Allowance for Doubtful Accounts 1,000 Bad Debts Expense 10.000 b. Bad Debts Expense 10,000 Allowance for Doubtful Accounts 10,000 c. Bad Debts Expense 1,000 Allowance for Doubtful Accounts 1,000 d. Bad Debts Expense 10,000 Accounts Receivable 10.000